Blain’s Morning Porridge 16th October, 2024: Boeing, throwing the dice [...]

30,000 Boeing Workers are on strike, further slowing airline deliveries, backing up supply chains and creating higher costs for passengers. With a potential downgrade to junk, and an emergency capital raise in view – is the Boeing End Game approaching?

Boeing is my pick as the worst company on the planet. Its’ stock is down 30% this year. It has failed multiple corporate governance challenges, but is also a victim of QE over-easy monetary policy: ultra-low interest rates enabled its cost-accountant management to wreck the company. Can it recover?

Boeing is a lesson in broken capitalism. It’s latest safety catastrophe highlights multiple management failures. Things are set to get worse as the Global Economy realigns and the US turns isolationist. Who will eventually dominate air travel?

This week’s “shock” announcement of a major aero-engine maintenance crisis with RTX engines on Airbus Neo Narrowbodies is reverberating round the aircraft market. It pushes up the value of older aircraft – and will impact many airlines.

The news “green” Pratt & Whitney engines don’t work very well on new aircraft puts a whole new slant on the economics of airlines – favouring mid-life planes over less reliable, but oh-so-environmentally-more-friendly new ones..

AI has become the markets new, new thang/bubble as investors pile into the new, new narrative forgetting the fundamental rules of investment are about generating dull, boring, predictable returns which look frothy in hot stocks, negative yields in bonds, thus positive returns from real assets stand out!

Aviation is booming. Airlines are buying planes. Passengers want to fly. There are just a few little problems... There aren’t enough planes. That makes Aircraft as an Alternative Asset a great investment opportunity.

Inflation across the West looks to be more entrenched than markets believed – Higher for Longer. Maybe it’s time to accept it’s going to take time to fix, and look elsewhere for returns.

Blain’s Morning Porridge Feb 2nd 2023 – The End of [...]